SALE OF CORPORATE ASSETS - AMENDMENT TO THE PIT AND CIT ACT 2014 - SERVICE-TAX

Sale of corporate assets - what will change?

There is a provision in the draft amendment to tax laws that is to introduce changes to the provisions on the allocation of income from the sale of an asset used in the business. It is to be qualified each time as income from business activity.

The discussed changes are to concern art. 14 section 2 point 1 of the Personal Income Tax Act:

Current wording

After changes according to the design

"Business income also includes:

1) income from the sale of assets used for the needs related to economic activity and in running special departments of agricultural production, which are:

a) fixed assets,

b) items of property referred to in Art. 22d paragraph. 1, with the exception of ingredients, the initial value of which is determined in accordance with article 5. 22g does not exceed PLN 1,500,

c) intangible assets

- included in the register of fixed assets and intangible assets, including revenues from the sale of assets listed in point (a) for remuneration. b, cooperative ownership right to the business premises or a share in such a law not included in the records of fixed assets and intangible assets, subject to paragraph 2. 2c; when determining the amount of revenues, the provisions of para. 1 and art. 19 shall apply accordingly. "

"Business income also includes:

1) income from the sale of assets for consideration, which are:

fixed assets or intangible assets subject to inclusion in the register of fixed assets and intangible assets,
the components of the property referred to in Art. 22d paragraph. 1, with the exception of ingredients, the initial value of which is determined in accordance with article 5. 22g does not exceed PLN 1,500,
assets which, due to the expected period of use equal to or shorter than one year, have not been included in fixed assets or intangible assets,
assets constituting a cooperative ownership right to a business premises or a share in such a right, which, pursuant to Art. 22n paragraph. 3, are not subject to the records of fixed assets and intangible assets

- used for the purposes related to economic activity or in the running of special departments of agricultural production, subject to paragraph 2c; when determining the amount of revenues, the provisions of para. 1 and art. 19 shall apply accordingly. "

After the changes, this provision is to show that the income from business activity is the sale of the assets in question. This is to apply to both components which, due to the foreseeable period of their use of less than one year, were not included in fixed assets, as well as components which the taxpayer - despite such an obligation - did not include in the register of fixed assets and intangible assets.